It seems straight forward.  Someone has the pay for the effort and services of a restaurant broker.  Why wouldn’t you get a better deal if you’re buying a restaurant by avoiding this fee?  Here’s the business case that shows it is FALSE to believe you will save money buying a business without a restaurant broker.

You’re not Paying the Bill but You’re Getting the Benefit

Restaurant brokers are paid by the seller, not the buyer.  The contract between a restaurant broker and his seller stipulates the commission is paid whether they participates in the sale or not.  There is (in almost all cases), a legally binding listing agreement in place.  Forgoing the services of a restaurant broker means you’re just blowing off good advice that could potentially save you money or gain you an advantage in negotiations.

The Restaurant Broker Has Seen It Before

It may be your first time buying a restaurant but the broker has done this dozens (or in this restaurant brokers case), hundreds of times.

Experience matters when buying anything.  Why not get the benefit of that restaurant brokers knowledge and expertise.  He or she (in my case) will have encountered virtually every scenario in a sale and have a strategy that has worked in the past.  Here’s an example of a creative strategy we applied to a deal that closed a week ago.

We had a buyer and landlord at a stalemate over a personal guarantee and the buyer was ready to walk.  With the creative assistance of the restaurant broker, the seller provided a wrap-around guarantee which gave the buyer enough comfort to move forward on the transaction.

That’s only one example of the many creative ways to get a deal moving forward versus stalled at an impasse.  That’s why our restaurant brokers average an astounding 90% closing rate versus a business brokerage industry average of only 30%.

The Restaurant Broker Acts as the Middle Man

A buyer and seller are automatic adversaries to one another in a deal.  The seller wants the highest price and the buyer wants to pay the least. The broker has facts, figures, comparable sales and information that demonstrate why the pricing is either justified or should be adjusted.  By the same token, the seller and landlord may be at odds over unpaid rent or CAMS or just have bad blood between them.  The restaurant broker is an independent third party that (typically) has a landlord relationship who can “sell” a buyer to the landlord as part of his or her services. That may be the difference in being approved or denied on transfer of the lease

A restaurant broker will often save you more than their fees.

As a restaurant broker I fight for my client and their interest.  If there is an advantage to be gained, I exploit it.  It is a rare scenario that this restaurant broker doesn’t earn back my commissions in benefit to the buyer.  Here are just a few ways you may see that happen.

Negotiation of Personal Guarantee with the Landlord

Presenting a client to the landlord is an art and as restaurant brokers, we have perfected the method of minimizing ongoing personal guarantees to the buyer.  That may not be worth hard dollars today but exiting a lease in the future without any personal liabilities going forward is worth its weight in gold.

Reduction of Deposit

Reducing the up-front costs of acquiring a restaurant by managing a deposit down is one benefit of using a restaurant broker.  Strategies we have used include delayed deposits (where more money is put down after 90 days), diminishing deposits (where a portion is returned after the first year) and applied rent deposits (where a portion of the deposit is applied to rent after the first year). 

Restaurant Brokers Have a Resource List of Solid Gold Suppliers

As a restaurant broker selling hundreds of restaurants, I know who delivers (on time) and at the best pricing.  It is an everyday occurrence for my clients to request an insurance quote from our resources and find it to be 20 – 30% BELOW other vendors.  Your restaurant broker is flat out – connected – in the business.  Whether you need to know the best price on food or the most effective email marketing company in the game, they have the answers.

True or False?  It’s easy enough now to see why it’s a false statement to believe you can save money buying a restaurant without a broker

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